Earlier today, the Walt Disney Company released plans to “turbocharge” investment in Walt Disney World, Disneyland, Disney Cruise Line, and the international parks to nearly double capital expenditures over the course of approximately 10 years to roughly $60 billion. Thanks to an investor conference, we now know that the expansion might include Wakanda from Black Panther and the World of Frozen.
Senior Disney executives, including CEO Bob Iger and Parks Chairman Josh D’Amaro, gathered with Wall Street analysts and investors at Walt Disney World on September 19, 2023 for an investor summit. This event is focused on Disney’s Parks & Resorts business, its track record, and future ambitions of investing aggressively and intelligently in experiences that leverage the powerful and ever-growing library of Disney stories.
This post starts with what the Walt Disney Company has released from the investor summit, including statements by Bob Iger and Josh D’Amaro. Following that, we’ll have commentary about the likelihood of these plans coming to fruition, plus how and where they could happen. Let’s start with comments from the CEO and Parks Chairman…
“We’re incredibly mindful of the financial underpinning of the company, the need to continue to grow in terms of bottom line, the need to invest wisely so that we’re increasing the returns on invested capital, and the need to maintain a balance sheet, for a variety of reasons,” said Bob Iger. “The company is able to absorb those costs and continue to grow the bottom line and look expansively at how we return value and capital to our shareholders.”
“We have an ambitious growth story that is supported by a proven track record and a bold vision for the future of our Parks business,” said D’Amaro. Central to the business’s growth strategy will be a focus on stories, scale, and fans.
According to a press release from the Walt Disney Company, its theme parks business serves as a powerful platform where beloved stories come to life in innovative ways, and where fans across generations and geographies can connect with and explore the Disney brands and franchises they love, from Avatar to Zootopia, and everything in between.
Disney continuously reimagines its theme park offerings to appeal to more guests by incorporating new stories from its popular films and series. Disney Parks has seen growth following previous periods of significant investment, which included the additions of Cars Land at Disney California Adventure, Star Wars Galaxy’s Edge at Disneyland Resort and Disney’s Hollywood Studios at Walt Disney World, Avengers Campus at Disney California Adventure and Walt Disney Studios Park in Paris, and more.
Today, as Disney considers future growth opportunities, there is a deep well of stories that have yet to be fully explored in its theme parks. Already, new Frozen-themed lands are coming to Hong Kong Disneyland, Walt Disney Studios Park in Paris, and Tokyo DisneySea. In the near term, World of Frozen will open in November 2023 at Hong Kong Disneyland.
Beyond the familiar favorites, Disney will explore even more characters and franchises, including some that haven’t been leveraged extensively to date, as it embarks on a new period of significant growth domestically and internationally in its parks and resorts.
“We have a wealth of untapped stories to bring to life across our business,” said D’Amaro. “Frozen, one of the most successful and popular animated franchises of all time, could have a presence at the Disneyland Resort. Wakanda has yet to be brought to life. The world of Coco is just waiting to be explored. There’s a lot of storytelling opportunity.”
Disney currently has the largest physical footprint of any global theme park travel business, with 12 parks across six sites around the world. Its newest resort, Shanghai Disney Resort, opened in 2016. This park will expand once again with a new Zootopia Land, including the ‘Hot Pursuit’ trackless dark ride in Late 2023.
Disney’s Parks business is a key driver of value creation for the company, and positive segment results in recent past quarters through FY23Q3 have come in part from strong performance at Disney’s international parks, particularly those in Asia. Shanghai Disney Resort and Hong Kong Disneyland, which have both shown meaningful growth coming out of the pandemic through Q3 FY23, have even further growth opportunities with the expansions set to open later this year.
In addition to development plans already underway, there is significant room for further expansion on land and at sea. “We stand alone when it comes to scale,” said D’Amaro. “And while our scale is impressive, we have no shortage of space or regions of the world in which to tell new stories.”
According to the company, Disney Parks has over 1,000 acres of land for possible future development to expand theme park space across its existing sites – the equivalent of about seven new Disneyland Parks.
Meanwhile, Disney Cruise Line serves as a vehicle for the brand in ports and markets around the globe beyond its theme parks, including Australia and New Zealand for the first time later this year, extending the reach of Disney’s experiences.
As previously announced, over the next two years, Disney will nearly double the worldwide capacity of its cruise line, adding two ships in fiscal year 2025 and another in 2026, delivering even further growth potential and introducing new markets to Disney experiences, including a new homeport in Singapore beginning in 2025 to expand its reach further into the Asia-Pacific region.
Disney has seven of the top ten most attended theme parks in the world, including Magic Kingdom at Walt Disney World, which has been the #1 attended theme park on earth for decades. Disney Parks welcome approximately 100 million guests each year.
Yet there is still enormous untapped potential for reaching more consumers. According to Disney’s internal research, there is an addressable market of more than 700 million people with high Disney affinity it has yet to reach with its Parks. In fact, for every one guest who visits a Disney Park, there are more than ten people with Disney affinity who do not visit the Parks.
“Ultimately what is most important to us is the relationship that we have with every guest,” said D’Amaro. “Guests can spend a day with us at our Parks, a week with us on a Cruise, or the rest of their lives with us through Disney Vacation Club membership.”
As Disney expands its footprint and offerings, not only will the company be able to reach more of its existing fans, but it will create new fans and loyal consumers. (Once again, all of this is according to the company–our editorializing doesn’t start until below the Frozen photo.)
As the company develops plans to accelerate and expand investment in its Parks business, it looks forward to introducing fans to more of the most powerful characters and stories, expanding its global footprint, advancing its state-of-the-art commercial capabilities, and leveraging its unmatched global talent to forge relationships with new generations of fans around the world.
“Throughout our history, we’ve created enormous growth by investing the right amount of capital into the right projects at the right moment,” said Iger. “We are planning to turbocharge our growth yet again with a robust amount of strategic investment in this business.”
Turning to commentary, there isn’t that much new ground covered here that wasn’t already weaved into the commentary of our post about the $60 billion in new investment. D’Amaro had mentioned Wakanda to the New York Times and I’ve long suspected that World of Frozen would be an upcoming addition to Disneyland, so those were both mentioned in passing.
Nevertheless, they’re probably both worthy of further elaboration and there are a couple of other topics that I forgot to address in that $60 billion post. So here goes…
Let’s start with Wakanda from Black Panther, which has been subject to a lot of rumors and wishful thinking from Walt Disney World fans since the first film was released and proved to be a smash success. There has been speculation that Black Panther would end up at pretty much every park except Magic Kingdom, and I still think there are multiple options here.
The first and most likely candidate would a Black Panther redo of Rock ‘n’ Roller Coaster. As a reminder, the New York Times did a piece back in November 2018 that included a tidbit about Rock ‘n’ Roller Coaster being rethemed to a Marvel ride. That article wasn’t just speculative–it involved Disney’s cooperation. It was quickly “corrected,” and my bet has always been that was because somebody jumped the gun and shared that prematurely.
Obviously, it’s been 5 years and a lot has changed since then. One thing that hasn’t changed is the popularity of Aerosmith and the unnecessary liability that a classic rock band presents (with minimal marketing upside). A retheme of Rock ‘n’ Roller Coaster is incredibly low-hanging fruit, and it’s only a matter of time before it happens. With nothing slated to open in 2025, maybe this will be that year’s “big” addition. (Air quotes around big because this is probably the cheapest and fastest possible option, and thus the most likely.)
Another possibility for Wakanda is it taking over the abandoned plans for the Play Pavilion at EPCOT. If I recall correctly, this was a competing concept that was a rumored replacement for Wonders of Life back in 2018. Obviously, it did not win out. Since the Play Pavilion was permanently shelved, there have been rumblings about ongoing issues with the building itself, so who knows how those come into play with its future prospects.
Repurposing the Wonders of Life pavilion into Wakanda would create a de facto Marvel miniland in World Discovery, and it could be the second ‘Other World Showcase’ pavilion. From Walt Disney World’s perspective, and as a matter of marketability, that probably makes a lot of sense. Personally, I don’t love the idea of more Marvel in EPCOT, but I suspect that Wakandan technology could be the jumping off point for this to be shoehorned into EPCOT. It wouldn’t make any less sense than the Wonders of Xandar, which works decently well as a framing device.
What I do not expect is a fully-fledged World of Wakanda. Both the Wonders of Life Pavilion and Rock ‘n’ Roller Coaster are attractive options because they could be themed to Black Panther without costing a billion-plus dollars to create a lavish and immersive Wakanda land. An attraction based on Black Panther would have tremendous drawing power, but I just can’t see Disney invested the time and money needed to create an elaborate, outdoor Wakanda area.
For what it’s worth, this has nothing to do with what Wakanda does or does not “deserve.” Personally, I think Black Panther is probably one of the best bets for theme park investment (and a lot is simply off-limits for Walt Disney World, regardless). I’m just skeptical that there’s much of an appetite to spend big on Marvel (or Star Wars), and think Wakanda could be an easy addition on a short timeline. With most of the big projects at Animal Kingdom and Magic Kingdom unlikely to open before 2026-2029, something is needed on a tighter timeline. Wakanda could be that gap-filler for 2025.
Finally, it’s possible that Wakanda isn’t in the cards for Walt Disney World at all, and this was a reference to Avengers Campus at Disneyland or Disneyland Paris. At Destination D23, more details were revealed for the Marvel Multiverse E-Ticket for Avengers Campus at Disney California Adventure. While this was previously touted as a King Thanos attraction, I could see it returning to the original setting, which was Wakanda. (Again, this would be Wakanda without having to create a dimensional land around it.)
D’Amaro’s second big tease was Frozen for Disneyland Resort. For years, there have been rumors of Fantasyland expansion at Disneyland. Most versions of this involve replacing Fantasyland Theatre and taking up some of the space between Toontown and Star Wars: Galaxy’s Edge or some portion of the lagoons and Autopia area on the opposite side.
Around 5 years ago, there was a credible rumor that revolved around Arendelle. We’ve suspected for a while that Disney has been waiting for World of Frozen to open at Hong Kong Disneyland, and see guest reception to that. That land has been getting a ton of marketing in the United States by Disney, which is really odd for an addition at HKDL. It makes sense that there’s an ulterior motive for that–to see how Americans respond to it.
If it’s well-received at Hong Kong Disneyland, moving forward on World of Frozen at Disneyland makes sense. Fantasyland is cramped, and opening up more walkways would ease the strain of crowds and help with capacity. Toontown has reopened and is more popular than ever, and also helps with the drawing power for this area of the park. Finally, World of Frozen would be cost-effective since they just built it in HKDL and have another version under construction in France.
Next, it’s worth covering Disney Cruise Line because we didn’t really mention that in our previous post beyond pointing out that a lot of the near-term CapEx is going to the expanded fleet. And that’s true, the fleet expansion is still underway, and a significant expense in the next couple of years.
However, we’ve heard a lot of disillusioned Walt Disney World fans lament that most of the $60 billion will be for DCL. Unless you think Disney Cruise Line is adding another half-dozen ships beyond what’s already announced, that simply is not the case. Much of the CapEx for the current fleet expansion has already been spent. The Disney Treasure and Disney Adventure are both in the home stretch; the latter will be the first Disney ship to sail from Singapore and throughout Southeast Asia, expanding DCL’s footprint to that side of the globe.
Then there’s Disney Lookout Cay at Lighthouse Point, Disney Cruise Line’s upcoming island destination. Again, this project is in the home stretch. That only leaves the 8th ship in the Disney Cruise Line fleet expansion as being a significant expense–and it will be, but even that is probably “only” around $2 to $3 billion. Otherwise, the money has pretty much already been spent on Disney Cruise Line. My guess would be that that known DCL projects amount to around $5 billion of the $60 billion.
With 4 fairly new ships that double the size of the fleet, I’d be surprised if a significant sum over the next 10 years is earmarked for Disney Cruise Line beyond the known additions. Perhaps that’s wishful thinking on my part as someone who would rather see expansion at Walt Disney World and Disneyland, but Disney Cruise Line already has a ton in the pipeline, and a lot of the costs associated with those projects are already accounted for. Further additions in the next decade are likely, but probably not until the dust settles on the currently planned ships and Disney is able to evaluate demand, etc.
Finally, there’s the future of Duffy and Friends. I included the slide on this from Disney’s 8-K filing with the SEC in the prior post, but didn’t actually address it. Honestly, I have no clue what, if anything, this Duffy representation means.
This could just be trumpeting the success of Duffy and Friends, which has become the highest selling franchise at the theme parks. But I really don’t think you highlight that $500 million sales (!!!) without having a plan for their future. Otherwise, that just invites a bunch of investor questions that don’t have good answers.
As for what that plan could be, again, no clue. Disney really needs to tread lightly here, or risk milking its cash cow dry. They have to do something so this isn’t just a merchandise machine, but whatever it is needs to be well-received among the Duffy disciples. I could see a stage show at Hong Kong Disneyland (I think they’re done with new rides for a while) and/or a dark ride at Shanghai Disneyland. And it’s beyond time for the characters to return to Walt Disney World–they’d be much, much more popular this go-round.
What are your thoughts on Wakanda from Black Panther or World of Frozen being added to Walt Disney World or Disneyland? What is your reaction to the Walt Disney Company’s purported plans to “turbocharge” investment and double CapEx to $60 billion on Park & Resorts in the next decade? Which potential plans or projects have you most and least excited? Anything you’re hoping does not end up coming to fruition? Do you agree or disagree with our assessments? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!